AI Trade in the Spotlight as Wall Street Awaits Nvidia Earnings 2/25/26

SPEAKER_1 (0:00)

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Jim Cramer (0:43)

It's Jim Cramer here. You're listening to the opening bell of CNBC Squawk on the Street. Don't miss a minute of the action.

Carl Quintanilla (0:56)

Good Wednesday morning, welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer, David Faber at Post 9 of the New York Stock Exchange. Future steady coming off the best day for stocks in about three weeks. Plenty to work with today. State of the Union reaction. Several companies with weak guidance, like Lowe's, Workday, Diageo, Lucid, HP, Nvidia, and Salesforce are tonight. A roadmap begins with a crucial moment for the AI trade as Nvidia does get ready to report. And the president says big tech will have to pay for its own power needs.

David Faber (1:25)

Meanwhile, Anthropic's CEO raising concerns about what he calls the overnight and accidental concentration of power in the AI industry. And Warner Bros., oh, it opens the door wide now for Paramount, which made its latest offer and is likely to lead to a superior one for that company. We'll have more on that in a moment.

Carl Quintanilla (1:45)

Let's begin with AI this morning in a State of the Union that some argue is relatively light on policy. The president did highlight a message he delivered to tech companies about data centers. Let's take a listen.

SPEAKER_7 (1:56)

We're telling the major tech companies that they have the obligation to provide for their own power needs. They can build their own power plants as part of their factory so that no one's prices will go up. And in many cases, prices of electricity will go down for the community and very substantially down.

Carl Quintanilla (2:14)

I've been combing through everything, Jim, looking for clues about what the market may be interested in. A very minimal comment about Iran and no mention of China.

Jim Cramer (2:22)

Yeah, I mean, I've found, look, I obviously were addicted to whatever could be said. You get a savings plan, a rollaway line, you get some notion of inflation, the president's view. But in general, David, I found that the, this, let's call it the self-power of the hyperscalers, is something that, it's time, I mean, it's a national issue. It's not a local issue. And I think that there are some that are free riders, but most of the companies don't want to be free riders.

David Faber (2:58)

No, but there's this whole issue behind the meter, in front of the meter, which is going to be, you know, you want to avoid, so if you're on the grid, then conceivably you're using power that is broadly available, obviously, and therefore the question is whether that power is going to become more expensive for everybody he uses as a result of the enormous needs of these data centers. I mean, yesterday we had this announcement with AMD and Meta, 6 gigawatts, if they get there, right? And obviously, it's all based on the build out over time. But 6 gigawatts of power, I mean, that just goes to the point that the president is making, which is the needs are enormous. We are in a race, obviously, with the Chinese, which, by the way, also means a separate story we'll get to, put aside safety to a certain extent, or those like Dario Amodei, who had been warning about things, but now is sort of saying, well, we can't win our race if we have to only abide by safeguards that nobody else has. So we're in this race, and power is going to be one of the key gating issues.

Jim Cramer (3:54)

Right, well, look, if we had Scott Strasic on, from GE, the biggest, for turbines, and he said, look, there's just a waiting list, Carl. It's waiting lists, let's say, five years. We got caught, everyone got caught in DRAMs. We didn't know we needed more memory. We didn't know that we needed more GPUs. I mean, that's why I think that when you listen to it's not a zero-sum game between Lisa Su at AMD and Jensen Wong, reports tonight, Nvidia. And we didn't plan on power. These companies just didn't plan it. It's been a horrible business. That's why. I think DRAM has been a horrible business. Disk drives have been a horrible business. And turbines have been a horrible business. So it wasn't like they're sitting around just saying, you know what? Hey, hit me. Hit me again.